Lupin had earlier acquired 60 percent stake in the South African (SA) firm in September, 2008.

As per the agreement, the founders of Pharma Dynamics will exercise their put option before March 31, 2015, for the 40 percent equity stake they currently hold in the company, Lupin Ltd said in a statement.

On completion of this transaction, Pharma Dynamics will become a wholly-owned subsidiary of Lupin, subject to closing conditions, it added.

The company, however, did not disclose financial details of the transaction.

"Lupin has been an extremely strong partner in our business since 2008 and we have always had an excellent relationship. The fact that Lupin has increased its shareholding in Pharma Dynamics is a huge compliment and augers very well for our continued success," Pharma Dynamics CEO Paul Anley was quoted as saying in the statement.

The move would add an additional global muscle to Pharma Dynamics' operations and support the next phase of growth for the company, he added.

Commenting on the deal, Lupin CEO Vinita Gupta said the drug firm is delighted with the development as Africa is fast emerging as one of the growth engines of the future.

"We deeply appreciate the efforts of Paul Anley in building Pharma Dynamics into a very robust and the fastest growing pharma major in the Republic of South Africa. We are very pleased that Paul Anley has agreed to continue as the CEO," she added.

Cape Town-based Pharma Dynamics, founded in 2001, distributes a range of branded, generic prescription medicines and over-the-counter (OTC) products in South Africa as well as other key markets across the African continent.

Meanwhile, Lupin shares were trading 0.41 percent down at Rs 1,870.40 apiece during afternoon session on the BSE.